It stands for variable-rate repo; a type of repo (repurchase agreement) in which the interest rate is changed in accordance with change in an auction rate, over the term of the transaction. The auction process is managed by a monetary authority on a frequent basis (bi-monthly) as part of the monetary policy review in a given country.

The repo rate is calculated as:

Repo rate = underlying index rate ± spread

Variable rate repos usually depend on monitoring and recording of the movement in floating rate indexes (e.g., overnight index, tom/next index, LIBOR or EURIBOR), usually over extended periods of time.

Examples of variable rate repos include: OI variable rate repo, tom/next-indexed repos, and term-rate-indexed repos.

Variable rate repos are also known as floating-rate repos.